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EVENING   POST  STEAM   PRESSES,  ao8  Broac.way, cor.  Fulton  St..  N.  Y. 

T  V- 


f 


n\n\ 


ON 

The,  Claim   of  Mutual  Insurance    Companies  to  he  paid 
their  Share  of  Losses  ovt  of  the  Award. 

The  facts  of  no  great  national  transaction  are  better 
authenticated  by  cotemporaneous  public  records  than 
those  relating  to  the  depredations  of  Confederate 
cruisers  during  the  civil  war,  the  reclamations  made 
for  the  sufferers  by  their  Goyernment  against  Great 
Britain,  and  the  award  made  by  the  International 
Tribunal  against  the  British  Government,  and  promptly 
paid  by  it,  on  the  ground  of  its  breach  of  the  duties  of 
neutrality.  The  transaction  and  its  history  have  an 
epic  completeness  in  its  beginning  of  wrong  and  loss, 
in  its  middle  of  national  demand  and  reparation,  and 
in  its  approaching  eud,  in  a  just  recompense  of  the 
sufierers.  It  is  not  necessary  to  step  outside  of  the 
record  to  search  for  the  facts,  or  to  have  recourse  to 
obscure  rules  of  law  to  establish  the  trusteeship  of  the 
government,  or  the  validity  of  the  claim  for  retribution 


>       J   3    1       >        »        » 


2 


made  by  those  for  whose  loss  the  Government  de- 
manded and  received  the  award.  A  brief  summary 
will  be  attempted  of  the  essential  facts  and  principles 
applicable  to  the  claims  of  the  mutual  insurers. 


Po!^tii1ate§. 

1.  Our  citizens  originally  had  no  claim  against  OUB 
Government  for  their  losses  inflicted  by  the  Con- 
federate cruisers. 

(a.)  It  might  have  assumed  a  liability  and  paid  the 
claims,  and  have  been  subrogated  tq  the  claim- 
ants'rights  against  Great  Britain. 

(6.)  Or  it  might  have  purchased  the  claims  (as  at 
one  time  contemplated)  and,  as  owner,  have  en- 
forced them. 

But  it  neither  purchased  the  claims,  nor 
assumed  a  liability  for  them  ;  never  acquired  a 
proprietary  interest  in  the  claims  or  in  the 
satisfaction  received  for  them. 

• 

(c.)  Any  liability  of  our  Government  to  the  claim- 
ants arose  subsequently,  out  of  its  representation 
of  the  claims  and  its  reception  for  the  owners 
of  the  indemnity  awarded. 

That  subsequent  liability,  so  incurred,  was 
limited  to  the  amount  awarded  and  to  the  class 
of  owners  to  which  it  was  adjudged  by  the 
tribunal,  viz,  the  owners  of  vessels  and  cargoes 
destroj^ed  and  those  who  had  succeeded  to  their 
right  of  reclamation. 

{d.)  All  other  claims  were,  by  the  judgment  of  the 
tribunal,  and  the  operation  of  the  treaty,  ab- 


•     •  •   •    •  • 

•    •  •!•••• 

•       •        *       •*•       *•• 


•-• 


•         •  •  •  •*.*.*••• 


■       •      • 
'..      . 


a 

solutely  estinguished.  (See  Art.  XI  of  the  treaty, 
and  the  final  decision  and  award,  which  declared 
that  the  claims  allowed  and  paid,  and  the  claims 
disallowed,  were  alike  finally  barred  by  the 
award). 

As  shown  by  the  documents,  the  claims  pre- 
sented Avere  in  Jive  classes  (Case  of  the  United 
States,  vol.  1,  pp.  185,  G,  8,  part  VI),  viz. : 

1.  The  claims  for  direct  losses  growing  out  of 
the  destruction  of  vessels  and  their  cargoes 
by  the  insurgent  cruisers. 

2.  The  national  expenditures  in  the  pursuit  of 
those  cruisers. 

3.  The  loss  in  the  transfer  of  the  American 
commercial  marine  to  the  British  flag. 

.  X         4.  The  enhanced  payments  of  insurance. 

5.  The  prolongation  of  the  war  and  the  addition 
^  of  a  large  sum  to  the  cost  of  the  war  and  the 

V  suppression  of  the  rebellion. 

*>,  The  third,  fourth    and  fifth  classes  of  claims 

^  were  ])ronounced  against  by  the  tribunal.      Mr. 

^-  Fish  thereupon,  under  date  of  June  22, 1872  (vol. 

'  II,  p.  579),  instructed  our  ageni,  Mr.  Davis,  to  com- 
municate to  the   tribunal  the   president's   acqui- 

*  esceuce  in  its  decision.     Mr.  Davis  communicated 
^  that  instruction  accordingly  (vol.  IV,  p.  21,  protocol 

*  VI,  June  25,  1872),  and  declared  to  the  tribunal 

*  that    "  the  above  mentioned  claims  will    not  be 
^  further    insisted    upon    before   the    tribunal    by 

the  United  States,  and  may    be    excluded  from 
all    consideration    in    the    award    that    may  be 
..    made."     Protocol   VII.  of  the   27th  June,   1872 
^    (vol.  IV.,  p.  22),  is  in  these  words  :  "  Count  Sclopis, 
on  behalf  of  all  the  arbitrators,  then  declared  that 


257F 


tli6  said  several  claims  for  indirect  losses  mer.-» 
tioned  in  the  statement  made  by  the  agent  of  the 
United  States  on  the  25th  inst.,  and  referred  to  in 
the  statement  just  made  by  the  agent  of  Her  Brit- 
tanic  Majesty,  are,  and  from  henceforth  shall  be, 
wholly  excluded  from  the  consideration  of  the 
tribunal ;  and  directed  the  secretary  to  embody 
this  declaration  in  the  protocol  of  this  day's  pro- 
ceedings." The  XXVII  protocol  (vol.  IV,  p.  43) 
states  :  "  The  tribunal  proceeded  to  consider  the 
questions  concerning  the  claims  for  expenditure 
incurred  in  pursuit  of  the  cruisers.  ^'  *  As 
to  the  claims  for  expenditure  incurred  in  pursuit 
of  the  cruisers,  a  majority  of  the  tribunal  decided 
to  reject  them  as  comprised  in  the  costs  of  the 
war." 

The  second,  third,  fourth  and  fifth  classes  of 
claims  were  thus  definitively  pronounced  against. 
The  only  class  left  was  the  first,  viz. :  "  The  claims 
for  direct  losses  growing  out  of  the  destruction 
of  vessels  and  their  cargoes  by  the  insurgent 
cruisers."  The  tribunal  thereafter  confined  itself 
exclusively  to  a  consideration  of  the  evidence  re- 
lating to  that  class,  and  of  the  evidence  to  show 
what  losses  within  that  class  were  caused  by  the 
British  breach  of  neutral  duties;  and  having 
solved  those  two  questions,  it  made  its  award  of 
fifteen  and  a  half  millions  of  dollars.  All  the  retri- 
bution was  awarded  for  the  devastations  of  three 
cruisers  and  their  tenders,  but  only  for  such  de- 
vastations as  the  tribunal  attributed  to  a  breach 
of  neutral  duties ;  the  ante-Melbourne  Shenan- 
doah devastations  being  expressly  excluded  from 
such  attribution. 

The  claims  of  the  mutual  insurers  all  fall  within 
that  class,  and  are  for  losses  which  they  had  paid, 
and  for  which  they  furnished  the  proofs  which  our 
Government  produced  before  the  tribunal. 


5 

2.  The  claim  for  Inclemiiity  for  those  losses  was  el-* 
clusively  against  the  Government  of  Great  Britain, 
on  the  ground  that  its  breach  of  neutral  duties 
imparted  to  the  confederate  cruisers  their  destruc- 
tive efficiency,  and  thereby  caused  the  destruction 
of  the  ships  and  cargoes,  in  respect  of  which  the 
demand  for  reparation  was  made.  The  tribunal 
adjudged  that,  by  the  law  of  iiations.  Great 
Britain  was  liable  for  only  direct  claims,  and  for 
only  such  direct  claims  as  the  tribunal  sliould  ad- 
judge and  allow  for  the  destruction  of  property 
attributed  by  it  to  Great  Britain's  breach  of  neutral 
duties. 

3.  The  British  Government  expressly  admitted  be- 
fore the  tribunal,  that  for  losses  of  owners  paid  by 
insurance  companies  the  claim  was  not  extin- 
guished by  such  payment,  and  that  the  paying 
insurers  were  subrogated  in  the  place  and  to  all 
the  rights  of  such  owners  to  recover  for  such 
losses.  The  claim  made  for  the  insurers  by  our 
Government,  and  conceded  to  be  valid  by  the  British 
Government,  was  allowed  by  the  tribunal,  and 
entered  into  the  computation  of  loss  that  made  up 
the  aggregate  of  the  award  finally  made  by  the 
tribunal  and  paid  to  our  Government  by  the  Gov- 
ernment of  Great  Britain. 

4.  All  the  indirect  claims,  and  among  others  the 
claim  for  war  premiums,  were  rejected  by  the 
tribunal ;  and  the  claim  for  losses  inflicted  by  the 
Shenandoah  before  going  to  Melbourne  was  *i^^' 
eluded  and  disallowed  by  the  tribunal,  expressly 
on  the  ground  that  they  were  not,  in  point  of 
fact,  attributable  to  a  breach  of  its  neutral  duties 
by  the  British  Government. 

5.  The  award  so  made  and  received  thereupon  be- 
came a  Trust  Fund,  for  the  payment  of  the  losses 


by  the  destruction  of  specific  sliips  and  cargoes 
presented  and  mged  by  our  Government  before 
the  tribunal,  an  indemnity  for  which  entered  spe- 
citically  into  the  computation  which  made  up  the 
aggregate  of  the  award.  The  character  of  a  trust 
is  impressed  upon  the  fund,  not  only  by  reason 
and  natural  justice  and  the  established  principles 
of  municipal  law,  but  b}^  the  immemorable  usage 
of  civilized  nations,  in  demanding  and  receiving  a 
retribution  for  wrongs  to  and  losses  by  subjects 
and  citizens ;  a  usage  to  which  our  own  Govern- 
ment lias  uniformly  and  honorably  conformed.  The 
trust  attaches  to  the  entire  fund,  and  to  all  the 
claims  which  entered  into  and  made  up  the  total 
award  ;  and  until  all  those  claims  are  paid,  the 
diversion  of  any  part  of  the  fund  to  other  objects, 
would  be  a  breach  of  trust  and  of  the  national 
faith. 

6.  A  citizen  who  is  wronged  by  a  foreign  govern- 
ment may  seek  for  redress  by  directly  appealing 
to  its  justice,  or  demanding  reparation  through  its 
courts  of  justice,  if  that  remedy  is  open  to  him. 
If  he  allows  his  own  government  to  represent  him 
and  his  claim,  befoi'o  a  tribunal  constituted  for 
the  determination  of  such  claims,  he  will  be  bound 
by  its  decision.  The  ante-Melbourne  SJiejiandoah 
claimants  were  so  represented  before  the  tribunal 
at  Geneva,  and  are  bound  by  its  decision  that 
their  losses  were  not  caused  by  a  breach  of  British 
neutral  duties. 

7.  It  is  conceded  that  a  government  cannot  be  com- 
pelled to  intervene  and  support  the  claim  of  its 
citizen  against  a  foreign  government.  But  if  a 
just  claim  of  its  citizen  is  persistently  refused  rep- 
aration, governments  which  respect  themselves 
and  demand  the  respect  of  others,  do  intervene  in 
such  cases.     They  choose  their  own  time,  earlier 


or  later  ;  and  the  manner  of  their  intervention, 
whether  bj  negotiation,  reprisals  or  war  ;  but  at 
some  time,  and  in  some  way,  tliej  maintain  the 
national  honor  by  upholding  the  just  demands  of 
their  subjects  or  citizens. 

8.  It  is  conceded  that  a  government  is  not  bound  to 
support  an  unjust  claim  of  its  citizen  against  a 
foreign  nation.  A  government  is  a  moral  person, 
and  is  not  bound  to  stain  itself  Avith  injustice.  But 
our  Government  insisted  upon  the  justice  of  the 
claims  that  made  up  the  Geneva  award.  It  will 
not  avow  that  it  consciously  urged  an  unjust  claim  ; 
and  if,  by  mistake,  it  did  urge  an  unjust  claim  and 
received  an  award  for  it,  the  plainest  dictates  of 
justice  and  honor  require  it  to  refund  the  money 
to  the  British  Government,  and  refrain  from  ap- 
propriating it  to  objects  not  within  its  own  con- 
templation in  making  the  claim,  or  within  the 
contemplation  of  the  tribunal  in  awarding  the  rep- 
aration, or  within  the  contemplation  of  the  British 
Government  in  paying  the  award  to  the  United 
States.  The  suggestion  that  our  Government 
obtained  money  from  Great  Britain  on  false  pre- 
tenses ought  to  be  indignantly  repelled. 

9.  But  the  claim  of  the  insurers  is  not  unjust.  Our 
Government  affirmed  it  to  be  just.  The  British 
Government  conceded  that  it  was  just.  The  trib- 
unal adjudged  it  to  be  just.  The  whole  rec- 
ord of  the  transaction  proclaims  its  absolute 
equity  and  validity. 

The  insurer's  claim  has  been  too  exclusively 
looked  at  in  its  technical  aspect  of  a  subrogation. 
It  stands  firmly  enough  on  that  ground.  The  con- 
tract of  marine  insurance,  out  of  which  the  right 
of  subrogation  arises,  is  an  agreement  that  if  the 
insured  will  pay  a  specified  sum  of  money  called 
a  premium,  and  will,  in  case  of  a  technical  total 


8 

loss  (wbicli  is  not  ahvays  or  most  usually  an  act- 
ual total  loss),  surrender  to  the  insurer  the  subject 
insured,  and  all  rights  of  reclamation  incident  to 
it,  the  insurer  will  pay  him  as  for  an  actual  total 
loss.  This  right  of  the  insurer  to  the  thing  in- 
sured and  all  reclamations  on  account  of  it,  is  called 
a  right  to  subrogation  ;  that  is,  the  right  to  be  put 
in  the  place  of  the  insured  as  to  the  ownership  of 
the  property  and  the  rights  of  reclamation.  The 
paj-ment  of  the  loss  ipso  facto  works  a  transfer  of 
the  title.  This  right  is  not  expressed  in  the 
policy ;  but  the  law  implies  it  as  a  part  of  the  con- 
tract, and  whatever  is  implied  is  as  much  a  part  of 
the  contract  as  what  is  expressed.  In  the  practice 
of  fire  insurance  the  insurer  pays  a  total  loss  only 
when  it  is  total.  In  marine  insurance,  the  insurer 
pays  a  total  loss  when  it  is  technically,  but  not 
actually  total,  and  saves  for  himself  what  he  can 
out  of  what  is  not  destroyed  and  out  of  all  recla- 
mations he  may  make  against  wrongdoers.  This 
is  what  the  insurers  now  claim,  and  all  they  claim, 
in  respect  of  the  losses  paid  by  them  on  ships 
and  cargoes  destroyed  by  the  Confederate  cruisers, 
for  which  Great  Britain  was  held  liable  by  the 
tribunal  and  paid  the  award  to  the  United  States. 

10.  The  claim  of  the  mutual  insurers  is  not  only 
a  claim  of  owners,  on  the  basis  of  contract  and 
the  principle  of  subrogation,  but  they  are,  on  an 
indeiDendeut  ground,  actual  owners  with  all  an 
owner's  equities. 

A  stock  insurance  company  insures  the  prop- 
erty of  others.  Mutual  insurers  insure  their  own 
property.  Mr.  A.  A.  Low,  owning  ships  trading  with 
China,  and  Mr.  A.  T.  Stewart,  making  large  impor- 
tations of  commodities  from  all  parts  of  the  world, 
may  be  supposed  to  enter  into  an  agreement  to 
create  a  fund  out  of  which  to  pay  all  losses  on  their 
ships  and  goods  at  risk  on  the  seas.     They  re- 


spectively  contribute  a  sum  to  constitute  that  fund, 
and  their  contributions  are  in  proportion  to  their 
respective  risks  afloat.  The  arrangement  is  con- 
tinued for  a  prescribed  period.  As  losses  occur 
they  are  paid  out  of  the  common  fund.  At  the 
end  of  the  prescribed  period  tliey  make  up  the 
accounts,  ascertain  how  much  of  the  fund  has 
been  used  to  pay  losses  and  what  balance  remains, 
and  they  then  divide  between  the  contributing 
owners  the  unexpended  balance  or  surplus  in  the 
proportions  in  which  they  contributed  to  the  com- 
mon fund.  That  is  an  exact  statement  of  mutual 
insurance.  The  parties  to  such  an  arrangement 
may  be  two  or  twenty,  or  two  or  twenty  thousand, 
but  the  transaction  is  identically  the  same  what- 
ever the  number  of  the  parties  united  in  it.  If,  in 
the  case  hj^pothetically  stated,  a  successful  rec- 
lamation were  made  against  Great  Britain  for 
property  destroyed  at  sea  and  paid  for  out  of  the 
common  fund,  the  sum  thus  recovered  would  be 
merely  a  reimbursement  of  owners,  and  merely  an 
increase  of  the  surplus  contributed  by  the  owners 
to  the  common  fund,  and  to  be  divided  between 
them  at  the  close  of  the  transaction  in  the  propor- 
tions in  which  they  had  made  their  contributions 
to  it.  The  mutual  insurers  seek  by  such  a  reim- 
bursement of  the  common  fund  to  which,  as 
owners,  they  contributed,  to  increase  the  surplus 
saved  and  to  divide  the  surplus  between  them- 
selves as  contributors  and  as  owners  of  the  de- 
stroyed property.  The  methods  by  wJiich  they 
make  the  distribution  of  the  surplus  saved  at  cer- 
tain periods,  is  matter  of  mere  form.  The  mate- 
rial and  substantial  fact  is  that  as  owners  tiiey 
contributed  the  fund  that  bore  the  losses,  and  as 
owners  divide  among  themselves  as  much  of  their 
common  fund  as  is  saved  by  reclamations  or  other- 
wise. Mr.  Shattuck,  the  eiijiiient  Boston  counsel 
for  the  war  premium  claimants,  frankly  admitted 
3 


10 

before  the  committee  that  mutual  insurers  do  not 
make  gains,  but  merely  save  what  they  can  out  of 
the  fund  they  contribute  as  owners,  to  pay  their 
associate  losses  as  owners.  His  suggestion,  that 
the  war  premiums  be  paid  directly  to  the  contrib- 
uting owners,  overlooks  the  fact  that  the  losses 
were  equally  borne  by  the  contributing  owners, 
who  were  not  insured  on  war  risks,  but  on  various 
sea,  river  and  lake  risks,  and  that  the  common 
retribution  can  be  distributed  equally  and  justly 
only  through  the  companies. 

Attempts  have  been  made  to  excite  prejudice 
against  these  mutual  insurers.  It  is  said  that 
they  charged  enormous  premiums  for  war  risks. 
If  they  did,  they  charged  them  to  themselves,  and 
the  charge  was  subject  to  a  rebate  and  return  of 
all  that  w^as  saved  out  of  the  common  transac- 
tions. The  statements  respecting  the  premiums 
charged  are  gross  exaggerations.  The  average 
war  premiums  during  the  whole  war  were  between 
two  and  three  per  cent.,  including  the  exception- 
ally high  premiums  charged  on  the  Shenandoah 
risks.  Those  exceptionally  large  premiums  were 
charged  after  intelligence  was  received  that  the 
Shenandoah  had  struck  the  whalers  in  the  North 
Pacific,  had  destroyed  a  dozen  ships,  and  was 
pursuing  her  career  of  devastation.  Owners  who 
had  not  heard  from  their  ships  flocked  to  the  in- 
surance offices  demanding  policies.  It  was  as  if 
a  fire  insurance  company  was  asked  to  insure  a 
house  in  the  middle  of  a  block  when  both  ends  of 
the  block  were  on  fire  ;  of  course  a  high  rate 
would  be  charged  for  such  a  risk  if  any  company 
would  take  such  a  risk  on  any  terms.  The  beak 
of  the  ha,wk  had  already  struck  the  frightened 
and  flying  bird.  But  high  as  the  Shenandoah 
premiums  were,  they  did  not  compensate  for  the 
losses  on  the  policies.  Those  losses  by  the  At- 
lantic Mutual,  after  payment  of  the  government 


11 


tax  and  the  returned  premiums  and  dividends  to 
the  insured  owners,  exceeded  the  premiums  by 
over  $155,000. 

It  has  also  been  said  that  the  insurers  specu- 
lated upon  and  made  money  out  of  the  calamities 
of  the  war.  It  has  been  shown  that  they  did  not 
speculate  at  all,  but  only  insured  their  own  ships 
and  cargoes  with  their  common  funds  contributed 
for  self-protection.  But  war  insurance  is  not  to 
be  made  odious  by  calliug  it  a  speculation  ;  it  is 
no  more  a  speculation  upon  tho  calamities  of  war 
than  a  peace  insurance  is  a  speculation  upon  the 
calamities  of  the  seas.  Insurance  is  a  handmaid 
of  commerce,  combining  the  resources  of  many  to 
prevent  the  ruin  of  a  few.  If  commerce  is  a 
blessing,  so  is  insurance,  which  is  a  mere  helper 
of  commerce.  The  insured  owners  were  prose- 
cuting a  lawful  and  beneficent  commerce,  largely 
to  procuie  medicines,  war  materials  and  other 
commodities,  to  enable  the  Government  to  prose- 
cute the  war  with  vigor.  If  the  merchants  we"e 
serving  their  country  in  the  voyages  in  which 
their  ships  and  cargoes  were  burned  and  sunk, 
the  insurers  were  no  less  serving  their  country  in 
assisting  the  merchants  to  prosecute  those  same 
voyages.  If  the  merchants  are  to  be  applauded* 
surely  the  insurers  are  not  to  be  condemned  for 
combining  their  contributions  to  save  the  mer- 
chants from  ruinous  losses  and  bankruptcy.  If 
the  Government  now,  by  a  legislative  act,  con- 
demns American  marine  underwriters,  and  denies 
their  legal  rights  as  long  allowed  in  the  courts  of 
justice,  it  must  happen  in  future  wars  that  Ameri- 
can commerce  will  be  driven  from  the  ocean,  or 
compelled  to  cover  its  war  risks  by  foreign  insur- 
ance ;  thus  ensuring  a  monopoly  of  the  business 
to  foreign  underwriters.  A  paternal  and  just 
government  should  not  strike  its  commercial 
interests  with  such  a  deadly  blow. 


12 

The  class  of  claims  represented  by  Mr.  Metcalf 
and  disallowed  by  the  trilmnal,  demands  more 
than  one-fifteenth  of  the  whole  Geneva  Award. 
If  the  owners  in  thai  chiss  had  combined  upon 
the  principle  of  mutual  insurance,  and  out  of  their 
contributions  to  their  common  fund  had  paid  their 
entire  loss,  it  is  not  easy  to  see  that  their  claim  to 
be  repaid  what  they  had  thus  lost  would  be  weak- 
ened. Their  case  would  then  have  been  the  case 
of  owners  whose  property  had  been  destroyed  by 
the  Shenandoah,  which  is  precisely  their  case  now. 
If,  in  addition,  the  tribunal  had  decided  that  their 
loss  had  been  caused  by  a  British  bieach  of  neu- 
tral duties,  it  would  have  been  allowed,  and  would 
by  so  much  have  increased  the  award.  Their  case 
would  then  have  been  identical  with  the  case  of 
the  marine  insurers.  Their  misfortune  is,  that 
the  tribunal  decided  that  their  losses  were  not 
attributable  to  a  breach  of  neutral  dutijs,  and 
therefore  excluded  them  from  the  award.  That  exclu- 
sion, which  cuts  off  their  claim  to  be  indemnified 
out  of  the  award,  is  made  the  meritoiions  ground 
of  their  claim  to  be  indemnified  out  of  that  very 
fund.  Ordinary  minds  cannot  follow  the  process 
of  reasoning  by  which  that  extraordinary  conclu- 
sion is  reached.  Upon  the  facts  in  the  record, 
two  things  are  clear  :  first,  that  if  only  the  ante- 
Melbourne  claims  had  been  presented  to  the  tri- 
bunal, no  money  would  have  been  awarded  to  the 
United  States  ;  and,  second,  that  if  those  claims 
had  not  been  presented  at  all,  the  award  would 
have  been  precisely  what  it  is. 

The  extraordinary  pretension  has  been  put  fortb 
in  support  of  the  ante-Melbourne  claims  to  pay- 
ment out  of  the  award,  that  Great  Britain  was 
liable  for  those  losses  but  that  our  Government 
condoned  that  liability  in  consideration  of  some 
national  advantage  received  by  itself.  If  that 
were  .true,  the  obvious  deduction  would  be  that  if 


13 

a  private  claim  was  surrendered  for  a  national 
benefit,  the  nation  should  pay  that  claim  out  of 
the  general  treasury,  for  the  manifest  reason  that 
what  the  i:ation  acquires  for  the  benefit  of  all 
should  be  at  the  common  cost  of  all,  and  that  the 
property  of  one  should  not  be  appropriated  to  pay 
the  deV't  of  the  many.  But  the  pretension  is  ut- 
terly unsupported  by  the  facts.  Our  Government 
surrendered  nothing,  and  received  nothing  from 
Great  Britain  as  a  compensation  for  some  right 
given  up  or  some  right  acquired.  The  three  rules 
of  the  treaty  declared  the  ]aw  of  nations  as  under- 
stood by  us  and  as  conceded  by  Great  Britain  for 
the  purpose  of  the  arbitration.  Those  three  rules 
certainly  did  not  narrow  the  rules  of  international 
law,  and  did  not  enlarge  them ;  and  the  tribunal, 
by  its  unanimous  decision,  Mr.  Adams,  the  Ameri- 
can Commissioner,  concurring,  adjudged  that  no 
liability  was  incurred  by  Great  Britain  under  the 
law  of  nations  for  a  breach  of  neutral  duties,  ex- 
cept for  those  direct  claims  for  which  the  award  was 
made  and  from  which  the  ante-Melbourne  claims 
were  excluded.  The  use  made  by  our  Government 
of  the  premature  proclamation  of  belligerency 
was  not  to  make  Great  Britain  liable  for  all  war 
disasters  that  afterwards  fell  upon  our  commerce, 
but  to  show  an  unfriendliness  on  the  part  of  the 
British  Government  which  interpreted  its  subse- 
quent neglect  to  perform  its  neutral  duties.  A 
mere  sentimental  unfriendliness  was  not  a  sub- 
stantive ground  of  liability,  but  interpreted  the 
subsequent  acts  of  the  Government  Avhich,  causa 
causans,  imparted  to  the  confederate  cruisers  their 
destructive  energy.  Those  acts  created  the  lia- 
bility, and  measured  it ;  and  for  all  the  losses  that 
resulted  from  iliose  acts,  the  Tribunal  charged 
Great  Britain  with  an  indemnity.  Our  Govern- 
ment was  not  faithless  to  its  great  duties,  and  did 
not  give  away  or  sell  the  rights  of  any  of  its  citi- 
zens. 


u 

It  has  been  made  a  point  that  our  Government 
secretly  instructed  its  counsel  to  prevent  an  award 
of  specific  sums  to  specified  claimants.  But  what 
just  inference  agaiust  any  claim  cau  be  deduced 
from  that  circumstauce  ?  It  was  a  policy  of 
caution.  Its  apparent  purpose  was  to  relieve  the 
Government  from  paying  out  of  its  general  treas- 
ury any  sums  that  might  by  mistake  be  awarded 
to  the  wrong  chiinuint,  and  for  Avhich  the  true 
claimant  might  make  a  reclamation  upon  the  Gov- 
ernment. Surely  the  purpose  was  not  to  enable 
the  Government,  capriciously  and  arbitrarily,  to 
divert  the  award  from  its  true  owner  and  give  it 
to  those  who.are  not  entitled  to  it  upon  the  prin- 
ciple upon  wdiich  it  was  adjudicated.  The  impu- 
tation of  such  a  purpose  insults  the  Government. 
The  Government  received  the  money  to  pay  it  to 
those  to  whom  it  belongs  under  known  laws,  and 
the  true  inquiry  is,  to  wdiom  does  it  so  belong? 

The  suggestion  made  before  the  comuiittee,  that 
ihe  claim  of  the  insurers  vv^as  in  the  nature  of  a 
double  claim,  and  had  been  rejected  by  the  Tri- 
bunal, could  hardly  have  been  serious.  The  award 
was  for  the  single  value  of  ships  and  cargoes.  To 
whom  it  was  to  be  paid  was  left  to  depend  upon 
the  fact  and  the  right.  If  the  owner  was  unin- 
sured, it  w\is  to  be  paid  to  him.  If  the  owner 
was  insured,  but  his  loss  had  not  been  paid  by 
the  insurer,  it  was  to  be  paid  to  him.  If  the  loss 
had  been  paid  by  the  insurer,  he  thereupon  be- 
came the  owner,  and  the  loss  was  to  be  paid  to 
him.  The  right  to  that  single  compensation,  to 
b5  paid  to  the  one  or  the  other,  was  asserted  by 
our  Government,  was  conceded  by  Great  Britain, 
and  was  adjudged  by  the  Tribunal.  To  affirm  the 
contrary  is  strangely  to  falsify  the  whole  record  of 
the  transaction. 

The  strength  of  the  marine  insurers  claim,  upon 
its  historic  facts  and  its  legal  principles,  seems  to 


15 

be  its  weakness.  If  the  claim  had  been  doubtful, 
they  might  have  been  suffered  to  go  before  the 
courts  and  attempt  to  establish  it.  The  certainty 
that  no  court,  of  law  or  equity,  would  stultify  it- 
self by  denying  the  validity  of  the  claim,  seems  in 
the  opinion  of  some  to  be  the  sufficient  reason  for 
withholding  from  them  the  right  to  be  heard.  They 
cannot  go  into  any  of  the  permanent  courts  of 
justice,  because  the  Government  will  not  permit  it- 
self to  be  sued.  They  cannot  go  into  the  court 
specially  created  to  adjudicate  upon  the  Alabama 
claims,  because  the  Gov  ernment  shuts  the  door  of 
that  court  in  their  face.  In  Eugland,  an  aggrieved 
subject  may  not  sue  the  Queen,  but  he  may  pre- 
sent a  petition  of  right  to  the  Court  of  Exchequer, 
and  that  court  then  proceeds  to  hear  his  case  and 
decide  it  upon  its  law  and  its  facts  as  all  other 
cases  are  decided  between  subject  and  subject. 
In  a  great  historic  case  like  this,  to  which  the  at- 
tention of  the  civilized  world  has  been  drawn,  our 
Government  cannot  afford  to  be  unjust.  It  cannot 
cover  up  injustice  by  a  nisi  prim  dexterity.  Mr. 
Burke  has  well  said  that  "  justice  is  itself  the  great 
standing  policy  of  civil  society,  and  any  eminent 
departure  from  it,  under  any  circumstances,  lies 
under  the  suspicion  of  being  no  policy  at  all." 

It  has  been  shown  that  our  Government  never 
acquired  for  itself  the  claims  of  its  citizens  against 
Great  Britain  for  the  losses  in  question.  It  never 
pretended  to  own  them.  It  never  pretended  that 
the  money  awarded  for  those  losses  and  paid  by 
the  British  Government  was  to  be  appropriated  to 
its  own  use.  It  never  pretended  that  it  was  re- 
ceived for  any  other  purpose  than  to  be  paid  to 
those  sufferers  who  had  proved  their  losses,  and 
for  whose  indemnity  the  Tribunal  awarded  the 
damages.  Those  who  are  represented  by  this 
argument  have  an  abiding  faith  that  the  Govern- 
ment, true  to  its  principles  and  its  traditions,  will 


16 

maintain  the  public  faith  before  the  American 
people  and  before  the  world,  and  distribute  the 
award  among  those  for  whose  use  it  was  made  and 
who  are  entitled  to  it  upon  every  principle  of  con- 
tract, of  law  and  of  policy. 

All  who  truly  love  their  country  must  wish  that  the 
last  act  of  our  Government  in  this  memorable  interna- 
tional controversy  may,  like  those  which  preceded  it, 
reflect  lustre  upon  the  national  name  ;  and  that  the 
centur}^  which  began  with  our  infant  struggle  for  in- 
dependence, may  close  with  an  illustrious  demonstra- 
tion not  only  of  an  indissoluble  national  unity,  but  also 
of  a  stainless  national  honor  and  justice. 

Joshua  M.  Van  Cott. 
Washington,  January,  1876. 


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